A Korean-American who runs a Christian NGO in a Chinese city on the border with North Korea is being investigated by Chinese authorities and has had his bank accounts frozen, a source with direct knowledge of the case told Reuters on Thursday.

Peter Hahn, a naturalised U.S. citizen, has been under interrogation by Chinese authorities for the last three weeks and is not permitted to leave the country, said the source, who requested anonymity, citing the sensitive nature of the case.

The source did not know what had prompted the investigation.

But several people working in the region or in contact with those that do said it appeared to be part of a wider sweep of Christian-run NGOs and businesses along the Chinese side of the border with North Korea.

China on Tuesday said it was investigating a Canadian Christian couple who ran a coffee shop in Dandong, a town south of Tumen along the border with North Korea, on suspicion they stole military and intelligence information.

Hahn runs a school for ethnic Korean children in the city of Tumen and, through his Tumen River Area Development Initiative (TRADI) NGO, operates several humanitarian projects and joint venture companies inside North Korea, including a local bus service in the Rajin-Songbon (Rason) Special Economic Zone.

The school declined to comment when asked about the case, and Tumen police could not be reached for comment.

A spokesman at the U.S. embassy in Beijing said he could not provide any information on the matter.

Hahn's company cars had been confiscated and his bank accounts frozen, the source said, adding that his NGO's humanitarian food shipments to North Korea had been suspended following the freeze.

The source said that Hahn was a Christian and was open about his faith.

China's twisting border with North Korea, which snakes through mountains and spans two rivers, has become a magnet for foreign missionaries in recent years.

Many of them are drawn to the Rason SEZ where foreigners including U.S. citizens can gain a residence permit and set up joint venture companies with the local government.

Hahn, who is based in California but has a residence permit for Rason, also runs a bakery that produces bread for children in the Special Economic Zone.

"China is digging up everything," said Simon Warner, a pastor at Jinju Church in South Korea who was aware of the investigation into Hahn. "It's been ongoing. The school had been closed," he said.

The investigation into Canadians Kevin Garratt and his wife Julia Dawn Garratt came a week after Canada took the unusual step of singling out Chinese hackers for attacking a key computer network and lodged a protest with Beijing.

In response, China accused Canada of making irresponsible accusations that lacked credible evidence.

"With the Garratts, that was tit-for-tat with what happened in Canada. Peter Hahn is a different issue, I think it's more related to his faith and the work he was doing," said David Etter, recently forced to close his Christian-run Western restaurant in Yanji, near Tumen, citing a lack of customers.

"He was very open about his faith and why he was doing what he was doing," he said